Local business types probably delivered lumps of coal to Mayor Gregor Robertson this Christmas once they saw the preliminary budget for 2012. And they may not end up being the only ones expressing displeasure.
They will have noticed that their five year ride during which time council shifted the property tax burden from their commercial property to residential property was coming to an end. (That's been at a rate of one per cent a year for four years and a quarter per cent next year.)
This has meant a shift of almost $24 million onto the backs of homeowners. Last year, commercial property tax was actually frozen. Homeowners picked up the full increase.
All this was in order to meet the recommendation of the Property Tax Policy Review Commission, which suggested that commercial property should bear 48 per cent of the tax burden while residential carried 52 per cent.
Council voted to approve the recommendation in March of 2008.
Not everyone on council was happy with that arrangement. COPE councillors complained each time the matter was raised-although not with enough effect to get them re-elected. And, you may recall, it was a major issue during the Vision mayoral nomination battle between Robertson and his closest rival, Raymond Louie. Robertson made the shift a deal breaker for him to run as mayor and Louie and the rest in Vision agreed to button their lips.
So are the folks in the Fair Tax Coalition happy they have succeeded? Are they ever happy?
None of that shifting, though, affected the city's bottom line, which we find, once again, in danger of producing another tax increase for all of us.
The preliminary deficit facing council is $52 million. To cover all of that with taxes would mean an increase of about 10 per cent. But don't panic just yet. It is all part of a dance staff does with politicians each year before they get down to serious nipping and tucking. Last year the figure was $55.6 million. The year before that it was $61.7 million. Before that it was $57.2 million.
For the past few years most of that potential deficit was thanks to what some call the Olympic wage settlement legacy. Following "Sam's strike," a four-month affair, the Sullivan administration struck a deal (matching the pattern set by Richmond) followed by the rest of the municipalities in the region. It provided a settlement that totalled 17.5 per cent (21 per cent when compounded) and provided a contract that guaranteed labour peace beyond the 2010 Olympics.
Well that deal runs out this year. A new round of bargaining has yet to begin. And you can bet the next settlement won't be zero. So buried within that potential deficit of $52 million is a huge whack of dough to cover the next settlement for 2012. Even so, within the budget documents, staff has said there is a "risk." Depending on the settlement there may need to be a mid-year budget correction.
In January, council will direct staff to reduce the deficit to a point where any tax increase is more palatable-say two per cent. But whatever snipping and clipping of services that take place to meet that goal could be just the beginning depending on how things go at the bargaining table.
One other point: While you have been trimming your tree and the staff has been contemplating trimming the budget, they have realized that this year's exercise will be particularly difficult.
For the past couple of years we have been watching a money saving exercise called the Shared Services Review where operations have been centralized and duplication has been eliminated. Most of the low hanging fruit has now been gathered in that exercise. IT departments have been consolidated along with carpentry shops and supply chains.
So no matter what council demands next month, you can expect to give up services or a bit more of your wallet.
